The Botswana Insurance Fund Management (Bifm) and The Motor Vehicle Accident Fund (MVA) rose to the challenge by increasing their shareholding in Kgolo Ya Sechaba (KYS) Investment and upping their stake to 81 percent – a move that will give them a free hand in determining the future of the company.
The move was the result of a decision that was taken at KYS AGM that took place in June 2006 where the main shareholders expressed frustration at the behavior of some minority shareholders who were unwilling to take risk.
“We were caught up in a situation where, in a number of meetings, minority shareholders were complaining that the shares of the company were not performing but, at the same time, were not willing to take risk,” Chief Executive Officer of Bifm, Victor Senye, said Thursday.
“The whole thing was so frustrating because most of the investors had about 0.1 percent shareholding each and they blocked some of the most important resolutions. The current situation now brings stability into the company because the majority shareholders can move a resolution,” he added.
Investors started to clamour for divided pay out at the height of the collapse of AfriTourism Limited (ATL) share price of KYS which had plummeted to 45 thebeÔÇöone of its lowest records ÔÇö- at the same time some of its key investments were engaged in some refurbishment exercises.
Faced with a frustrating situation, the main shareholders at the 2006 AGM decided to come up with a three pronged strategy: involving the possibility of a jumble sale of the entire company, pushing for a shareholding that would give them a free hand in the running of the affairs of the company or letting things as they were.
That led to the appointment of PriceWaterHouse& Coppers who came with a fair value of 60 thebe but Bifm and MVA upped it to 65 thebe in a bid to entice some of the investors to sell.
Now Bifm and Motor Vehicle Insurance Fund (MVA) ÔÇô who hold 81 percent between themselves ÔÇô are expected to map out a long term strategy for the company.
It is envisaged that KYS, which has only a practical investment of 25 percent in Gaborone Sun International valued at P 24 million at the 2006 prices is contemplating to spread its wings across the region to increase the shareholders value.
The move comes at a time when the company is exploring certain new development opportunities which are aimed at giving the company a competitive edge against its competitors.
The move is part of a raft of measures that have been at the center of the future strategy of the company and is expected to give it the energy to expand and refurbish as it engages its peers in the industry.
So far, it has carried out some of the daunting tasks that involved the refurbishment of the Gaborone Sun International Casino and the Botsalo Hotel as it tries to improve its standing against Grand Palm Hotel. This is in the light of the Casino regulations that require dividing gambling halls into smoking and non-smoking areas.